The money represents the value of pavement overlays that are in fair condition, and the cost to bring those up to good condition, said Cam Gilmour, director of the county's Department of Transportation and Development. "We thought it was rather low," he said.

The county instead did its own analysis of the roadway and estimates it would cost more than $8.78 million to bring the county's portion of the roadway up to an acceptable condition.

"There are a number of safety improvements needed on the highway," Gilmour said. "In the long run, there is quite a bit of liability potentially. This is an asset in slow decline. At some point, they'll have to be replaced."

ODOT is considering transferring ownership of Oregon 43 to Portland and Multnomah and Clackamas counties. Most officials agree that Oregon 43 no longer functions as a state highway but more as a local arterial. Therefore, it makes sense that local jurisdictions would control the roadway.

"I think everybody agrees this ought to happen," Gilmour said. "But nobody who agrees is saying they have the money."

Commissioners were especially concerned with long-term maintenance costs and capacity issues on the chronically congested roadway, which runs for about six miles through the county from the border with Multnomah County south almost to Interstate 205.

"Those bottlenecks along 43 need to be worked out," Commissioner Paul Savas said. "Who is best-equipped to deal with that? The county? Obviously not. The cities? Obviously not."

The county has already said its decision would depend on whether Lake Oswego and West Linn, the two cities most of the road runs through, would accept jurisdiction of their portions.

“The difference between what is being offered and what we think the road needs is a huge gulf,” Mayor John Kovash said in March.

"Our condition up to this point is that we wouldn't accept the transfer of it to the county unless West Linn and Lake Oswego would concurrently," Gilmour said.

Today's decision sends county officials back to the negotiating table with ODOT officials. "ODOT appears to be very firm on the $3.5 million," Gilmour said, and it's unclear if the state would raise its offer.